The Uber business model and The Hawaiian Bill 36

Posted by jeenniwill on August 31st, 2017

Despite the lengthy protests and threats to leave, Uber in Hawaii has expressed it will continue operations in Honolulu. On August 3^rd, 2016 the Honolulu City Council approved a measure 8-1 to establish regulations for taxis and transportation network companies (TNCs) like Uber and Lyft.

This bill requires that rideshare drivers have identifying stickers placed on their vehicles and their driver certificates displayed, just like cabbies. This is a tough situation for Uber as the vehicles used in its platform doesn't belong to Uber.  You can use register your car on the Uber platform as an Uber driver or rent your car to intending Uber drivers. The Uber business model details how to rent your car to Uber. You can read our post here to learn more. 

In addition to displaying stickers, the council put up a central database where drivers have to register and the bill also mandates that drivers be subjected to a state-style background check.

What City Authorities Think

Shedding light on their reasons for the establishment of the Bill 36, Ann Koyabashi said: “We just want everything to be fair. What’s good for the taxi companies is good for the TNCs and vice versa”. Koyabashi introduced the first bill, along with several new amendments, which passed in this final vote.

What Taxi Operators Think

These taxi companies still believe that the bill still hasn’t provided enough consumer-end protection. They expect that the bill should also address rideshare drivers fingerprints submission into the National database and restriction of surge pricing, which allows TNCs to raise prices when demand is high. Taxi cab companies have always felt that TNCs have unfair advantages over them and have pushed for a level playing field for all parties. They argue that the exemption of TNCs from some of the charges and procedures that strangle local taxi operators make it difficult to compete equally with ride sharing companies. 

What Uber Thinks

Uber, who initially planned to exit Honolulu once the Bill was announced has stated that while it is highly disappointed by the decision, it won’t be leaving that fast. Stating their position and reason for “lurking” around, Brian Hughes, General Manager of Uber in Hawaii opined: “I think it remains to be seen as we observe the implementation of this law… As the council said, this is viewed as a starting point, so we’re very committed to continuing to collaborate with the local government.”

When asked what they think Bill 36 would mean for the business and how it hurts their strategy, an Uber spokesperson gave KHON 2 this example: “very simple issues like having a two-hour a week driver put a permanent change to their car and create unnecessary red tape so they can use their personal vehicle with their existing driver’s license to support their own families”- as one of consequences of Bill 36.